Digital Company: Estonia or Hong Kong?

As we stated in pour previous post on how to open a company in Estonia, many countries still require to be physically there to manage a company, or, they make you tax liable just by the fact of having a company there.

In this post we wanted, however, to make a comparison between two of the most popular places to establish your digital Company: Estonia and Hong Kong

Digital Office

Hong Kong: Neat

Estonia: Xolo

Anti double-taxation treaties


Let’s focus on the service provider Xolo, the most standard one.

Before becoming an e-resident of Estonia, it’s important to fully understand what this means, and what the benefits are. It’s also crucial to know what e-Residency isn’t.

Understandably, the best place to start is the e-Residency website, along with their excellent blog which features updated news stories about the e-Residency program, in-depth guides and how-to walkthroughs. They fully explain what it means to be an e-resident, and why people from all over the world have already taken up the opportunity.

They also offer a dedicated page for starting a company with e-Residency, showing all the different service providers and the packages they offer. And if you want to talk to some of the thousands of e-residents, there’s a dedicated Facebook group for e-residents, fans of e-Residency, and the people who run the e-Residency program. This enables everyone to share opinions and discoveries, as well as get their questions answered in a quick and efficient way.

e-Residency website

Finally, we’d encourage you to take a look at our own Xolo FAQs, and in-depth blog. Our FAQs don’t just cover Xolo specific questions, but a lot of the questions that first-time e-Residency business owners have asked us in the past. They’ll also introduce you to all of the features of our two products, the pricing, and everything we take care of for you.

Doing your research and visiting some, or all, of the links above, will give you a fuller picture of what e-Residency is and how it can benefit you as a business owner. You’ll understand the key appeals of the program, and if you have any questions, you’re welcome to contact us. We’re always happy to help anyone with questions, even if you’re not a customer yet!

One thing you might pick up on, is that the Estonian government offers its own accounting software and company registration options, and promotes these. We wouldn’t encourage you to use them unless you’re good at accounting, and already familiar with Estonian laws and regulations. We at Xolo have designed our sign up, and company setup processes, with our customers in mind. Everything is made as simple as possible, and we walk you through every step on the journey.

  • Our initial sign-up for Xolo Leap, where we learn what your company does and who you are
  • Our step-by-step onboarding process, where you’ll choose your company name, get your e-Residency (if you haven’t already), and then sign all of the relevant documentation to get your company up and running
  • And finally, choosing the best banking option for your company

We also offer support throughout, so you’re never left in the dark, and we’ll be there to answer any questions. And that’s even for the little things, like how to properly use your ID card, or where you can get a decent coffee in Tallinn.

Finally, it’s incredibly important when you’re signing up for Xolo Leap, or even thinking about starting a company with e-Residency, that you understand that this is a business. You need to take time to consider your business plan, and why you’re starting a company, not simply do this on a whim or for fun.

Becoming an e-resident

As we mentioned above, applying for and getting e-Residency is part of the onboarding process for Xolo Leap. However, you can start applying before you even choose your service provider, and the first step is the application form on the e-Residency website.

You’ll need the following ready, so you can upload/submit/use them:
  • A copy of your government-issued ID
  • A passport-style digital photo
  • Your motivation statement — a written paragraph about your reasons for applying, which is used by the Estonian Police and Border Guard Board in their assessment of your application
  • Your Visa or Mastercard, to pay the state fee of €100

Once the application is done, it’ll take up to 30 working days to receive a response. All being well, this should be an approval, and you’ll be able to go and collect your e-Residency starter pack. During the application, you can specify your preferred collection point, which will be one of many Estonian embassies or consulates. Upon collection, your fingerprints will be digitally scanned, and you’ll need the same government-issued ID with you that you uploaded previously.

e-Residency application form

Choosing your service provider

You’d presume this is where we’d tell you Xolo Leap is your only choice, but that wouldn’t be true, and maybe we won’t fit with your company. So, it’s a good choice to look again at the options presented on the e-Residency website, and assess which one is best for you.

This will depend largely on your company type, as the services offered vary from complete packages to simple accounting and bookkeeping. There are also services listed that’ll help make your day-to-day life as an e-resident a little easier, such as Smart-ID, which we’ve written about at length.

e-Residency service providers

Xolo Leap is built for location independent entrepreneurs, solopreneurs, and freelancers. We can help you build a single person business, and whilst you don’t have to be a digital nomad or strictly location independent, we’re a cost-effective option if you are.

We offer a full package option, helping you through the company setup process, explaining each step along the way and offering support. Applying for e-Residency can be done as part of this process, or beforehand, as mentioned previously. You’ll get to use your digital signatures during the process, and we’ll help you through getting a banking account for your company.

Once you and your company are accepted forby Xolo Leap, we’ll take care of your accounting, taxes and compliance, along with compiling annual reports for you to sign off once a year.

Of course, there are also businesses we unfortunately can’t yet support. These include:
  • Businesses involved in buying and selling physical goods
  • Businesses who require a license in Estonia, such as financial services (incl. crypto-currencies), travel agencies, energetics, the sale of alcohol, gambling, and so on.
  • E-service marketplaces

If you’re in a business we can’t support, or you can see that our product wouldn’t suit you, you can use one or multiple other service providers to get your business booming in Estonia and Europe.

Getting Xolo Leap

If you decide that Xolo Leap is the right choice for your business, then you can complete our free sign up. We’ll take a look at the information you enter, and evaluate if we’re the best option for you. If we have any questions, we’ll be in touch, and we’re happy to answer any questions you might have.

Once you and your business are approved, you’ll enter our onboarding dashboard. We give you an overview of all the steps you’re going to go through before incorporating your company in Estonia.

Some of them are:
  • Entering your business description – you’ll need to describe your business, it’s purpose, and how you see it becoming successful. We need it to see if you’re a good fit for Xolo Leap (although if you’re at this stage having done research, you probably are!), and we also submit it to the Estonian Business Registry, Estonian Tax Board, and on your bank account application.
  • Choosing your company name – obviously a big choice, and something you’ll have to put some thought and research into. We’ve even written a blog to help you out if you’re finding it hard to pick a great name.
  • Paying state fees and our first month fee – There are two one-off state fees you’ll need to pay, €190 to register your business, and €25 for your business’ online registration. You’ll also pay €49 (+ VAT) which is your first month starter fee for Xolo Leap.
  • Digitally signing your application and other documents – This might be your first chance to use your e-resident ID card, and the digital signing capabilities. You need to sign your business registration application, along with a few other documents, before everything is complete.>
  • Waiting for your application to be approved – Once everything is done, you’ll need to wait up to 24 hours before receiving an approval. This isn’t guaranteed, but a rejection is incredibly unlikely at this point.

Choosing a banking option

A crucial decision you’ll make for your new Estonian business is how you do your banking. There are two choices here, a traditional Estonian banks and a modern fintech option.

These are our partner bank LHV and Estonian-founded company TransferWise. We’ve even compared the difference between the two in an extensive FAQ article.

You can take a look at that article if you want the full picture, but here’s a brief look at the three of them both.


LHV is Xolo’s partner bank in Estonia, offering business banking services to our e-resident customers. As they’re a bank in the traditional sense, choosing them does have one drawback – you’ll need to visit Estonia for a face-to-face meeting before your account can be setup.

In the long run though, an account with LHV is incredibly beneficial. We’re integrated with them, so you’ll always be able to see your account balances in your Xolo Leap dashboard, as well as all incoming and outgoing transactions. They also offer a business credit card with your account, and can receive money in 16 currencies.

Also, if you do choose to visit Estonia, we’ll make sure your account has pre-approval before you come, meaning your visit to Tallinn could even take less than a day.


Originally only a money transfer company, TransferWise recently launched their Borderless account, allowing you to hold money in over 40 different currencies and convert between them at a very low cost.

The account also offers you the opportunity to have local bank details for Australian dollars, New Zealand dollars, British pounds, Euros and American dollars, meaning you’re able to get paid as if you had a local business bank account within these countries (or the SEPA zone for euros).

And on top of that, they’ll offer a debit card to go along with your business account, so you can spend easily in all of your currencies. And the best bit – you can sign up remotely, no matter where in the world you are, and your card will be posted to you.

We’re also integrated with them via API, so you can connect your Borderless business account to your Xolo Leap account, and see your balance in your dashboard as well. So it is definitely worth getting a TransferWise account, even if just to use their regular international transfer service, which will save you some serious money.

These are your two options, and a lot of the decision boils down to whether or not you want to visit Estonia, but we’d sincerely encourage it. A business bank account with LHV will make your daily business with Xolo Leap much easier, and Tallinn is a beautiful place to spend a few days if you have the time.

Running your company

After you’ve signed up, completed your application, got approval, and got your bank account, you can start running your company. As you’ve signed up with Xolo Leap, and we’re taking care of the daily administrative tasks, you’ll be able to serve your clients more efficiently, without worrying about your taxes or the legal sides of running your business.

The first thing you ‘ll get once everything is completed, is access to your Xolo self-service dashboard. Here you’ll also be able to create or upload invoices, to match every incoming payment to your company. Equally, you’ll also need to upload any expense documents, matching all outgoing payments you make. If you have business expenses, you may need to explain the expense and why it was necessary, and you can see more information about expenses in our FAQs.

If you do choose to create your invoices within the self-service dashboard, it’s helpful to know that we’ll calculate the correct taxes for you. You’re also able to duplicate invoices from previous ones, and choose your customer from a predefined list so you don’t need to write everything out every time.

It can’t be overstated how important it is that your finances are conducted correctly and according to the law. Whilst we take care of a lot of this, these are the things you’ll need to do monthly to assist us:

  • If you’re not with LHV, upload copies of your bank statements
  • Make sure all incoming payments have a corresponding invoice (either created in self-service, or uploaded)
  • Make sure all outgoing payments have a corresponding expense document
  • Make sure all business expenses are proper and correct
  • Reply to our emails or requests in a timely manner
  • (Annually) Review and sign documents when requested

Using the self-service dashboard should keep your life simple, and you shouldn’t need to use any other accounting software for your company. We try and keep the complexity to a minimum so everything is displayed cleanly and simply, and you aren’t in any doubt about your company’s finances. We’re also always happy to assist with any questions you have, so don’t ever hesitate to drop us an email.

The same people who’ll be assisting you, are the people who run your account, prepare payments, declare taxes, contact you for documents, compile your annual reports, and request your digital signature when needed. The human aspect of Xolo is crucial, and ensures you receive the best possible service and support at all times.

And we’re always open to feedback. The work never stops for you, and it never stops for us either. We’re constantly looking for ways to improve our product and add new helpful features to our self-service dashboard, so if you have any suggestions, let us know. We want Xolo Leap, and Xolo itself, to be the best it can be, so you can be even better.

If you create your company with Xolo, you’re the owner and single board member of your company, so you have responsibility for your company’s operations. You can pay yourself a salary or dividends, and you need to report your earnings and pay social taxes in your country of residence.

They’ll assist you with company incorporation, business accounting and banking, keeping on top of taxes, staying compliant, and even liquidation if it’s ever required.

How can I receive funds from my company (operating outside Estonia)?

If you own and run an Estonian company while operating outside Estonia and not being a tax resident in Estonia, there are 2 main options for receiving funds from your company:

  • receive salary
  • receive dividends

There’s no obligation to pay any salary or take dividends, if you are the sole shareholder and employee of your company. It’s reasonable to argue that when a business is still in its infancy, the company can’t afford to pay out anything. So you can start operating your company without receiving any salary. Similarly, you do not have to pay out any dividends even if you could.

You have the following combinations available:

  • keep all the money in the company and reinvest to boost your business or
  • receive salary only (no min nor max sum) or
  • receive salary + dividends

If I have no revenue, is there anything I can do to lower my fee?

If your company has no revenue coming in, and no activity taking place, you can consider hibernating your company for a while to consider your next steps. This lowers your fee to €29 a month until you want to get started again. As soon as your company starts making revenue, or you’re actively using it, your fee will return to the normal monthly price. Hibernation can only be considered once you are over €1000 in revenue, and it is treated on a case-by-case basis, so is not guaranteed.


Setup fee €335

for e-Residency & Business setup and registration

The full, first year

(considering you exceed the 1000€ revenue limit on the first month:

335€ +12 x 79€ x (1+20% VAT) = 1472.6€ first year

Second year

1137.6 € second year and beyond

Hong Kong

Business Accounts

We are going to explain the features when opening it on Neat, the easiest service available out there.

It is no secret that it has become increasingly difficult for non-residents to open Hong Kong bank accounts. That is especially true for business bank accounts and while the banks cite KYC regulations as the cause, profitability is often closer to the truth. SME accounts just are not profitable enough, in the context of Hong Kong.

This has obviously become a significant source of friction and a major deterrent to registering a location independent business in Hong Kong.

Things are changing, however, thanks to a number of fintech startups dedicated to bringing Hong Kong banking into the twenty-first century. One of those is, a wallet service .

Foreign-owned, Hong Kong-registered businesses can open an account online in minutes, without the need for a personal visit. Multiple MasterCard prepaid cards can be issued and a number of accounting and invoicing features are offered at no additional cost. Best of all, the account is linked to a real, dedicated Hong Kong bank account number (unlike most of these wallet services which use shared numbers). This means that you can link it to PayPal, Stripe and any other services you wish.

It is important to understand that the product is still very much a work in progress, however, and that you will likely experience more friction than you would with similar services in Europe or the US. It still is better than having no account, in my opinion.

To open an account, simply visit this page. You will need your business registration documents, your business plan and the KYC documents for all directors and shareholders. Depending on your business activities, you may have to provide additional documents. It takes around one week for an account to be activated. Pricing depends on business activities and so does account limits. has a long list of blocked countries, if you are from one of those countries / reside in one of those countries you are pretty much out of luck.

Now on to the nitty-gritty. While the account is dedicated, it is important to understand that it is not a true Hong Kong bank account. Funds are not covered by the government guarantee scheme, there are types of payments you cannot send and some functionalities such as direct debit and cheque writing are not available. As for the cards, they are coded as prepaid MasterCards and must be loaded separately. In other words, they are not MasterCard Debit and they do not draw automatically from the main account. This is a positive, in my opinion, as it allows for greater flexibility especially when cards are issued to employees and contractors. With that said, you will not be able to use them for services that require debit or credit cards.

Incorporation in Hong Kong

Neat offers also an incorporation Package, for those willing to set up their company in Hong Kong

And remember to apply our offer code, so you will get 50$ back: VERDI1

How long does it take to open a company in Hong Kong?

It takes around 2 weeks to incorporate your company and open your Neat Business Account.

This includes time reviewing whether compliance standards are met for a Neat Business Account, and the entire company incorporation process.

What’s included in the price?

Their package includes:

  • Filling out incorporation documents (NNC1 – IRB1)
  • Payments of government fees (Incorporation Fee: HKD 1,720, Business Registration Fee: HKD 250)
  • e-GreenBox*: They will e-mail you a digital copy of all your documents: Incorporation Form, Certificate of Incorporation, Business Registration, Articles of Association, a share certificate
  • 1 year registered and correspondence address
  • 1 year company secretary
  • Initial consulting after company incorporation
  • 1 certified true copy of all your documents will be kept at our partner office in case you need them
  • Creation of the Significant Controller Register (SCR)

* If you want a traditional physical green box, this can be arranged at an extra cost.

What’s required to open a company in Hong Kong?
  • At least 1 shareholder
  • 1 director (one of which has to be a natural person, not a company)
  • 1 licensed company secretary (provided by us)
  • 1 Registered address (provided by us)
  • Completed NNCI and IRB1 forms (included in incorporation package)
  • Significant Controller Register (included in incorporation package)
  • Certificate of Incorporation (HKD1,720) and Business Registration (HKD250) (included in incorporation package)
What will happen after the incorporation? Can you help with accounting and company compliance?

After the incorporation, our accounting partner will get in touch with you to go through the steps in terms of legal maintenance, accounting obligations and record keeping according to Hong Kong law.

There is no contractual obligation to work with them. You may always choose another company secretary and accountant.

What are the ongoing costs of maintaining a Hong Kong company?

You will need a company secretary to provide company secretarial services (e.g. filing changes of directors or shareholders with the Companies Registry), a registered address, a correspondence address for official letters, file the annual return and pay the annual return fee (HKD105), pay the business registration fee (HKD2,250 per year), update your significant controller register (SCR).

The registered address and company secretary are included for the first year. At the end of your first year, you may continue working with our partner to help with your company maintenance.

You are also required to do your accounting, audit your accounts and fill in a tax return. Costs of accounting and auditing vary based on your transaction volume and specific needs.

Do I need to be a Hong Kong resident to open a Hong Kong company?

No, you don’t have to be a Hong Kong resident.

Does Neat hold a TCSP license?

Yes, Neat does hold a TCSP license, and we partner with TCSP-licensed service providers to carry out the company incorporation and provide corporate services. Our partners charge special rates to Neat customers, which is why we can offer a better rate compared to going to a corporate service firm directly.

What is the profits tax rate in Hong Kong?

Hong Kong uses a two tier system. On the first HKD 2,000,000 profit, you will pay 8.25% tax. If your profit exceeds HKD 2,000,000, you will have to pay 16.5% tax on the exceeding amount.


You can also schedule a meeting with a consultant (HKD 1,200 – 45 mins) if you have more elaborate questions and would like to get an individual consultation about e.g. company structuring or tax planning.


Government Incorporation Fee (HK$1,720)

Business Registration Fee (HK$250)

Fixed fee: 2970: 223€

Also, you need to include (included if you purchase Neat):

  • 1 Year Registered Office Address (mandatory)
  • 1 Year Company Secretary (mandatory)
  • Digital Copy of Official Company Documents

Total Price: HK$5,000: Around 500€ the first year

And remember to apply our offer code, so you will get 50$ back: VERDI1

Final amount of 450€ for the first year

Extra: Singapore

Singapore continues to be the economy with the most business-friendly and secure environment. For example, resolving commercial disputes in Singapore’s court system on average takes around 150 days, which is the shortest time in the whole world. The cost of the same is 26% of the claim’s value, which is significantly low compared to the fellow Asian country of Myanmar, ranked 167 out of 189 economies, where it takes three years to resolve a dispute and the fees run more than 50% of the disputed value. In the U.S, it takes 420 days to resolve such a dispute, and the cost is more than 31% of the claim as indicated by the same report.

However, on a digital perspective, there is no complete self-service digital service avilable. Nevertheless, a total standalone company can be set up using PikoHANA